This Is Innovation: Tippling At Whole Foods

Whole Foods CEO John Mackey explains how bars started springing up among the grocer's premium aisles. Hint: It involves organizational structure.

So Whole Foods CEO John Mackey—he of Conscious Capitalism, quasi-mystical self-awareness, and other exhorted enthusiasms—recently sat down with our sister publication Inc. to explore some of his many manifestos.

One such manifesto regards the brand's positioning: Rather than trying to be the cheapest and most efficient (like, he says, other food retailers) "Whole Paycheck," as some of us know it, is going after being the best, which means constantly experimenting. And they can innovate rapidly, he says, because they're so decentralized.

Decentralization leads to innovation. Which, curiously enough, leads to drinking next to the granola display.

Where the bar began

About three years ago the Whole Foods in Santa Rosa, Calif., did something unconventional: They put in a bar in the store. The grocer had always been a spot to grab a bottle to bring home, but never a place to imbibe on-site. And there it was, Mackey says: 16 taps, widescreen television, even chairs.

"(The) first time you think about it, putting a bar in a supermarket seems like a really stupid idea," he told Inc. "It's like 'people don't go to bar in a supermarket, that's crazy.' That's what I would have thought too, until it opened up," he says, "and it exploded."

Soon the bar was doing better business than seafood by just selling beer and a bit of wine. So, like the flu, the idea spread: Pictures and schematics got shipped around, and soon bars were sprouting up everywhere. There are now 75 bars, none of them mandated by Whole Foods HQ.

And from his "incognito" excursions to in-store watering holes, Mackey has found a differentiating factor between a glass at Whole Foods and your nearby dive: security. It can feel claustrophobic if someone's creeping on you in a dimly lit tavern, but in the confines of the premium grocer, weirdo behavior is stymied as thoroughly as your urge to not spend 10 dollars at the salad bar.

Bottom Line: Let ideas bubble up from everywhere in your company—revenue will likely follow.

Watch the original video here.

[Image: Flickr user Harpagornis]

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  • Katie Cink

    I work for an innovation process consulting firm, and one of our principles is that there is value in every idea--especially the ones that seem crazy or impossible, because it's easier to ma 

    In fact, one of our brainstorming techniques, called "Get Fired Ideas," is designed to make you think of ideas that are so far out in new territory, they might get you fired. One of our facilitators wrote about it here:

    Thanks for a great article, Drake!

    Katie Cink, Concept Writer

  • Katie Cink

    Great article, Drake!
    Having the patience and tolerance to give ideas that, at first glance, seem crazy and implausible is a key component of innovation, so it's great to see Whole Foods (successfully!) expand their business model in this way.
    I work at a company called Ideas To Go, an innovation consulting firm, and in our projects we use a brainstorming technique called "Get Fired" to come up with ideas in totally new areas--the types of ideas that might get you fired if you were to actually implement them. Facilitator Susan Robertson wrote more about it here:  

  • Ben Bell

    Great idea.  It's a shame John Mackey's views on climate change are not as progressive as his business strategy.

  • David Osborne

    Wegman's, a grocery store based in NY with stores in the north east and mid-atlantic, has a location in Virginia with a small ~20 seat restaurant also serving beer and wine in the middle of the prepared food section. They also have a large hot meals section and seating area. Before visiting that location I had never imagined a grocery store could be a social scene on Friday nights, but it's amazing to see that customers shop after work and enjoy the experience rather than rushing through to get home. It seems like a great idea that I'd like to see expanded on there, and at more locations.
    Since Whole Foods has good, high-end meats and seafoods it seems like it would be a great idea to expand to serve meals, provide recipes, and send the customers out the door with a bag of 'try it at home' ingredients and matched beverages.